U.S. demands big NAFTA changes, setting stage for tough talks

The Trump administration began talks Wednesday to reform the 23-year-old North American Free Trade Agreement, a negotiation that could boost US business and fulfill one of the president's primary campaign promises - or end up jeopardizing the North American economy.

The Trump administration lectured Canada and Mexico on the failures of the current agreement at an opening news conference Wednesday morning, while behind closed doors negotiators began to seek significant concessions from America's neighbors. However, he also said the deal had "fundamentally failed many, many Americans and needs major improvement", adding that the deal had cost hundreds of thousands of jobs (an assertion that some analyses have disputed).

Economics Professor Tom Fullerton, chair of the Study of Trade in the Americas at the University of Texas at El Paso, says US negotiators will also be working to keep existing lines of free trade open, allowing continued exports of Texas beef, cotton and corn to Mexico and Canada. "We can not ignore the huge trade deficits, the lost manufacturing jobs, the businesses that have closed or moved because of incentives - intended or not - in the current agreement", he said.

Alberta Economic Development and Trade Minister Deron Bilous is set to discuss Alberta's position in the NAFTA negotiations on Thursday afternoon.

He cited Mexico's sales of fruits and vegetables to the U.S.as an example.

Dan Ujczo, an international-trade attorney who advised members of Trump's trade team, said, "Most economists will tell you that trade deficits are not necessarily a bad thing".

Lighthizer acknowledged that NAFTA has benefited some Americans, like farmers and ranchers who found new markets for their goods in Canada and Mexico.

Seated next to Lighthizer was John Melle, an assistant US trade official who will be chief negotiator for the U.S.in the NAFTA talks, and the USA trade representative's general counsel, Stephen Vaughn.

"We do not believe that changes to the NAFTA auto rules of origin alone will accomplish a goal to increase employment here in the U.S.", Ann Wilson, senior vice president for government affairs at the Motor & Equipment Manufacturing Association, said in a statement. "Canada does not view trade surpluses or deficits as a primary measure of whether a trading relationship works", she said in her opening statement.

NAFTA negotiations are expected to continue until the first of the year, rotating between the three countries.

Mexican Economy Minister Ildefonso Guajardo said, "I am not denying that there have been some transfer of jobs".

But the NATA, I think there was serious consideration to indeed tearing it up, giving notice and it would have taken six months for the United States to pull out but, particularly the farm community in the United States, protested, came back and said look this is working for us.

Trade analysts noted that the administration has few negotiators with previous NAFTA experience.

The pact also has massively boosted US farm income by increasing agricultural exports to both Mexico and Canada.

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